Party Gaming Shares Take A Dip
Published: Thursday, June 08, 2006 Online-Casinos.com
PARTY GAMING SHARES TAKE A DIP AFTER STOCK SALES BY FOUNDERS
Control of company remains unchanged to comply with Gibraltar licensing
Following last week's news that two of the four founding directors of publicly
listed company Party Gaming would be standing down, the market reacted
this week to the sale of a 5 percent stake in the company by all four partners.
The stock fell by 4.5 percent in heavy mid-week trading as other investors followed
suit.
Dresdner Kleinwort Wasserstein (DrKW) raised a lower-than-expected GBP
232 million ($431.6 million) in the shares sale, representing around 5 percent
of PartyGaming's stock.
The size of the deal was reduced to 200 million shares from 350 million originally
planned, dealers said, adding that the eventual price was below the indicated
range of 119-120 pence.
Media reports said that the selling shareholders are Nitin Jain and founders
Anurag Dikshit, Russell DeLeon, Ruth Parasol and Vikrant Bhargava.
"The disposal of these shares has been expected since May 23 when Vikrant
Bhargava resigned as marketing director and Anurag Dikshit announced that he was
relinquishing his board responsibilities to concentrate on product and platform
development," said analysts at ABN AMRO.
A PartyGaming spokesman said: "The founders still have to maintain a majority
holding until 2010 to keep the company's status in Gibraltar. And if they chose
to sell below, they'd have to give the company 12 months notice."
PartyGaming was founded as an online casino by Parasol and DeLeon in 1997. Dikshit
joined in 1998, Bhargava in 2000, and the company diversified into online poker
in 2001.
"We believe that the founders could still reduce their combined shareholding
by about 11 percent without risking the loss of their favourable tax status in
Gibraltar," said ABN AMRO.
Gibraltar-based PartyGaming, which floated last year, handles nearly half the
online poker market.
